The Canadian Investment Regulatory Organization (CIRO) has published a new rules bulletin for its investment dealer and mutual fund dealer members, indicating that the Canadian Securities Administrators (CSA) have approved new total cost reporting rules.
First jointly published in April 2023 by the CSA and the Canadian Council of Insurance Regulators (CCIR), the total cost reporting enhancements are intended to improve investment fund and segregated fund contract fee and cost disclosures for consumers.
“The amendments seek to further investor protection by mandating enhanced transparency of investment fund costs and ensuring regulatory alignment on the matter,” CIRO states. The amendments, effective on January 1, 2026, will require dealer members to deliver their first enhanced annual fee reports to clients containing the required information, beginning with the year ending December 31, 2026.
The Canadian Life and Health Insurance Association (CLHIA) was among the organizations providing feedback which requested further clarification and guidance. CIRO says it will provide this in future guidance. “In the meantime, we encourage dealers to refer to the Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations and the accompanying sample of the annual cost and compensation report for further guidance.”
They add that no changes to the amendments were needed in response to the comments provided.
Specifically, the amendments specify the method for calculating the aggregate amount of fund expenses and clarifies the dealer’s responsibilities regarding the reportable fee information. They also indicate that the regulator’s staff may grant exemptions if the costs of requiring the dealer member to comply with the reporting requirements outweigh the benefit to clients.
“Although staff have the authority to grant exemptions from the date the amendments come into effect, we encourage dealers to begin the application process ahead of the implementation date,” the rules bulletin states.
